Hong Kong Stock Observer

There have been many negative media headlines recently about the collapsing stock prices of famous Chinese ADR companies and Hong Kong large caps due to a combination of regulatory uncertainty and in the case of the ADRs, potential delisting by the American authorities. Year to date the Shanghai Stock Exchange SSE 50 Index, which is an index of the fifty largest and most liquid A-share stocks listed in Shanghai, has declined 10% compared to a 20%+ increase for the SP 500. Over the past five years, the SSE 50 Index, as well as other key indices for markets in Shanghai, Hong Kong, and to a lesser extent Shenzhen, have all underperformed the S&P 500. Of major Chinese indices, the Shenzhen 100 Index (SZSE 100), which tracks the largest 100 stocks listed in Shenzhen, has evidenced some of the best performance with a return over the last five years of ~88% compared to ~105% for the S&P 500.   This chart shows the S&P 500 versus the SSE 50 over the past five years and is not adjus